Growing Pressure on MSMEs in a Changing Economy
MSMEs are widely recognized as the backbone of Indonesia’s economy, contributing to job creation and income distribution. However, rapid technological change, environmental concerns, and global market competition are reshaping how small businesses operate.
In Kedurus, a subdistrict in Surabaya, approximately 25–30 MSMEs operate in sectors such as food processing, handicrafts, and home-based services. Despite their potential, many of these businesses face structural challenges. Marketing strategies often rely on word-of-mouth, digital adoption remains limited, and financial management practices are frequently unstructured.
At the same time, awareness of sustainable business practices remains low. Issues such as non-eco-friendly materials, poor waste management, and unsustainable packaging limit the ability of MSMEs to compete in increasingly environmentally conscious markets.
A Participatory and Practical Approach
To address these challenges, Mar’a Elthaf Ilahiyah, Dian Ratnasari Yahya, Mochamad Jamil, and Krisna Damayanti from STIESIA designed a participatory community program tailored to local needs.
The initiative began with field observations, interviews, and discussions with MSME actors and community leaders to identify key barriers. Based on these findings, the program focused on four core areas:
- Sustainable and environmentally friendly production
- Digital marketing and online promotion
- Product hygiene and certification
- Financial literacy and bookkeeping
Training sessions were delivered through interactive workshops, group discussions, and hands-on exercises. Participants were then supported through ongoing mentoring to ensure practical implementation of new skills.
This approach allowed MSME actors to actively engage in problem-solving while gaining relevant, applicable knowledge.
Key Findings: Measurable Improvements
The program produced clear improvements in both knowledge and business practices among participants.
Financial management:
- Participants learned to separate personal and business finances
- MSMEs began recording daily transactions systematically
- Basic understanding of financial statements improved
Digital marketing:
- Awareness of social media as a marketing tool increased
- Participants began exploring online promotion strategies
- Digital literacy showed gradual improvement
Business collaboration:
- Peer discussions fostered knowledge sharing
- Stronger networks formed among local entrepreneurs
- Collaborative problem-solving became more common
Before the intervention, many MSME actors relied solely on experience rather than structured knowledge. After the program, several participants were able to simulate bookkeeping practices and apply them in their businesses.
Real-World Impact and SDG Alignment
The findings demonstrate that integrating SDG principles into local business development can create tangible benefits.
By aligning with SDGs such as decent work and economic growth (SDG 8), responsible consumption and production (SDG 12), and climate action (SDG 13), MSMEs are encouraged to move beyond profit-oriented models toward more sustainable and inclusive practices.
The program also contributes to building a local economic ecosystem that is more resilient and adaptable. Improved financial management enables better decision-making, while digital marketing expands market access. At the same time, environmentally responsible practices increase long-term competitiveness.
As Mar’a Elthaf Ilahiyah from STIESIA explains, the participatory approach plays a crucial role in ensuring relevance and effectiveness. By involving MSME actors directly, the program creates a learning environment where knowledge is both shared and applied.
Challenges and Future Directions
Despite the positive outcomes, several challenges remain. Limited access to technology, inconsistent financial record-keeping, and varying levels of digital literacy continue to hinder progress.
The researchers emphasize that one-time interventions are not sufficient to produce lasting change. Continuous mentoring, advanced training in financial management, and stronger collaboration with government and private sector stakeholders are needed to sustain the program’s impact.
Future initiatives should also adopt more customized training approaches to accommodate different educational backgrounds and business experiences among MSME actors.
Author Profile
Mar’a Elthaf Ilahiyah is a lecturer and researcher at Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA), Surabaya, specializing in MSME development and sustainable business practices.
Dian Ratnasari Yahya, Mochamad Jamil, and Krisna Damayanti, are also affiliated with STIESIA and focus on community empowerment, financial literacy, and digital transformation in small businesses.
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